Exploring the Meaning of Success in Outsourced Product Development

Research on outsourced product development has focused primarily on the motives behind firms’ decisions to outsource, with less attention paid to the outcomes of those decisions. The few existing academic studies have reported high failure rates, but there is little consensus as to what is meant by “project success” and “failure” and some do not define success at all. Such ambiguity makes comparisons difficult and hinders explanation of observed variation in project outcomes. This paper explores the many meanings of project success in outsourced product development, based on in-depth interviews of thirty design consultants and clients. After reviewing the merits and limitations of each metric, we propose that the client’s willingness to recommend the consultant may be a suitable outcome variable for assessing project outcomes and comparing success rates across diverse projects, companies, and industries. We present preliminary data that suggests client willingness to recommend varies widely and is multimodal in distribution. Finally, we identify several commonly encountered failure modes, i.e., sequences of events that generate discrepancies between client expectations and project deliverables, thereby producing client dissatisfaction.